Asia: Stocks follow Wall Street gains, China recovers one day after central's bank ratio cut

LONDON (ShareCast) - Asian indices were higher on Tuesday following Wall Street's lead, after starting the week on the red. The Nikkei 225 was up 1.4% thanks to a weaker yen. The currency was at ¥119.59 against the dollar at 09:39 GMT.

Bank of Japan governor Haruhiko Kuroda said over the weekend that the bank is making progress with its plan to raise inflation.

He said the bank's policies are having their "intended effects and the economy is making steady progress in conquering low inflation".

In economic news, the Japanese coincident index fell to 110.7 points in February from 113.2 the month before, while the leading economic index declined slightly to 104.8 from 105.

China's Shanghai composite index gained 2.79% and Hong Kong's Hang Seng rose 2.79% following the People's Bank of China (HKSE: 3988-OL.HK - news) 's decision to lower its reserve requirement ratio for the country´s lenders by one percentage point to 18.5%, the most aggressive cut since 2008.

Australia's ASX also recovered from Monday's losses and was 0.67% higher, but investors remained cautious about the Aussie market.

Reserve Bank governor Glenn Stevens said on Tuesday at a press conference held by Goldman Sachs (NYSE: GS-PB - news) that an interest rate cut is "on the table".

Stevens said: "Interest rates should be quite accommodative and the question of whether they should be reduced further has to be on the table." In other news, Augustin Eden from Accendo Markets warned: "Non-mining investment is still subdued in Australia, which is trying to move away from its economic dependency on raw materials amid commodity price doldrums." Australian iron ore miner Rio Tinto (Xetra: 855018 - news) fell 2.3% after posting an increase in first quarter iron production that trailed forecasts.

Rio Tinto said in a statement it expects to meet its full-year production targets but delivered lower-than-expected iron-ore shipments in the first quarter as a result of poor weather and transport delays.

Its rival BHP Billiton (NYSE: BBL - news) also lost 1.59% due to lower commodity prices.

Elsewhere in Japan, Toyota Motor gained 2.24% and Mitsubishi Electric was up 3.47%.